How can you pay yourself through an llc?

7 Replies

Talk to your accountant. It's not hard to pay yourself through a single member LLC since it's essentially pass through accounting but you want to make sure you do it in a way to avoid getting taxed twice on the $$

Just make sure to keep track of it. The simpler better, ask if it’s better to pay yourself a salary so it’s predictable accounting or in large one-time increments.

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You need to talk to your tax professional. 

An LLC can be a single member disregarded LLC- in which case you're prohibited from taking formal payroll via a w2. In this circumstance you can typically just withdraw or contribute funds as needed.

An LLC can have multiple people and be a partnership in which case you can't receive payroll or w2- it's distributions or guaranteed payments.

An LLC can elect to be an S corp - in which case it NEEDS to pay you via payroll.

However just blindly changing to an S corp is terrible advice because S corporations aren't typically a good option for rentals and we don't know what you're doing with your business. 

@Natalie Kolodij, advice is spot on.  except in VERY specific and limited circumstances, running rental through an S corporation adds an additional layer of complications and MAY cause more taxation.  However, in the very limited circumstances too complicated to go into here, the payroll aspect of the S corporation may allow a high income earner to pay himself enough to decrease his taxes via (1) payment into a retirement account and or (2) qualify for the 20% write-off for unincorporated businesses.  Although an S corp is a business, it is a pass through entity and treated as such under Federal tax regs.